IMF Resources May Not Suffice If Crisis Worsens, Lagarde Says

The International Monetary Fund’s $384 billion lending chest may not be enough to meet all loan requests if the global economy worsens, Managing Director Christine Lagarde said.

“The fund’s credibility, and hence effectiveness, rests on its perceived capacity to cope with worst-case scenarios,” Lagarde said in an “action plan” distributed to the IMF steering committee today. The current lending capacity “looks comfortable today but pales in comparison with the potential financing needs of vulnerable countries and crisis bystanders.”